It is not the Churchill we are most familiar with – he looks anxious, uncertain, subdued – but it is a portrait that the wartime leader regarded as the finest of himself, one that captured his soul.

The National Portrait Gallery said the first world war portrait of a 41-year-old Churchill would go on public display on Thursday following an agreement with the Churchill estate to exhibit it on long-term loan.

The gallery's 20th-century art curator, Paul Moorhouse, said: "For me, this is the greatest Churchill portrait, undoubtedly … it is Churchill at his lowest point, the most fraught period in his entire life and career."

Churchill's downbeat demeanour is understandable. It was painted in 1916, not long after the unmitigated disaster of Gallipoli, a campaign that Churchill, as First Lord of the Admiralty, had been largely held responsible for. By the time soldiers evacuated the Dardanelles strait and Gallipoli peninsula, in what is now Turkey, 46,000 allied troops had been killed. Churchill, who instigated the campaign, was forced to resign from the government, although and a commission of inquiry would be held that year into the entire Dardanelles fiasco. It concluded he could not be held personally responsible.

Given that he was preparing to defend himself against charges of incompetent and reckless leadership, it is not surprising the portrait by the celebrated artist William Orpen captures a mood of intense uncertainty.

Moorhouse said: "We know as well that Orpen found the process of painting Churchill fraught and painful, he described him as the 'man of misery'. All of that is in the portrait, you can see it."

While Orpen spoke of the misery, Churchill told the artist: "It is not the picture of a man. It is the picture of a man's soul."

Churchill kept the painting throughout his life, and that, said Moorhouse, was probably because he thought the portrait "true, rather than flattering or idealising, perhaps it served as some kind of caution for the future".

Apart from its inclusion in an Orpen exhibition at the Imperial War Museum seven years ago, the portrait has not been displayed in public and has been kept in the family until the death in 2010 of his grandson, the former Tory MP also called Winston Churchill, who wanted the painting to be shown in the National Portrait Gallery.

The 5ft x 4ft portrait will be lent for at least 10 years and goes on display in the early 20th century room. In future years it will be made available to the Churchill Museum, in Whitehall, for special displays.

It will join a Walter Sickert portrait of Churchill, which is on display at the gallery, and studies for a Graham Sutherland portrait that Churchill despised as he thought the finished work made him look half-witted. His widow destroyed the Sutherland portrait on his death. "It does tell you that Churchill felt strongly about the portraits that were made of him," said Moorhouse.